It’s clear that New Zealand housing is wildly overvalued and being used as a way to hoard wealth. How on earth did we get here?
They say it can’t be done, but here at Wealth Morning we attempt to broadly forecast what’s coming next for the economy. In this section we are looking at the property market.
Once you understand the underlying forces which drive the economy, you will have access to insight that few people ever attain.
It has less to do with the movement of central banks or the stock market. Or movements in interest rates, inflation, or some other mechanism.
It’s based on the real estate market.
What happens in the real estate market underlies the economic cycle. And the cycle simply continues to repeat.
Property Markets History
A man by the name of Homer Hoyt identified the repetition of this real estate cycle in a book written back in 1933, called ‘One Hundred Years of Land Values in Chicago.’
A study of history as Homer Hoyt did it, with a focus on land values, proved the economy moved in a very clear sequence of roughly 18 to 20 year cycles.
It’s directly related to land and property price and it repeats regardless of government policies and the type of government in power.
And nothing has changed since Homer Hoyt wrote the book in 1933. The real estate cycle simply keeps reaffirming itself.
The financial reforms initiated after the global financial crisis, have only guaranteed yet another real estate cycle, as that crisis was not financial in nature.
It was a land crisis
And whilst the underlying cause of the cycle is ignored, the real estate cycle must repeat.
Baltimore lives on the edge of civility…like a city on the frontier of the Sahara, gradually being taken over by the desert.
Price is what you pay. Value is what you get. But in a world of conflicting information, how do you figure out where the value gap is?
We want to showcase a true beauty — the Onekaka Links Golf Club. The courses here are simply stunning. Picture-perfect with a serene atmosphere.
Fintech is one sector that could disrupt a day-to-day commodity we all use: banking and finance. Here’s how it will work in the future.
Right now, I smell the start of another potential revolution. Millennials are looking for new, innovative ways to solve their housing crisis.
Opportunity cost is what you give up in terms of money when you make one decision over another. Here’s what it’s actually costing you…
Too much inflation and price instability becomes unmanageable. It feeds on itself to erode economic confidence.
We are offering our first-ever Investor Training Event to help investors get to the bottom of things.
Simon Bridges announced a raft of changes aiming to get New Zealand moving. And with super-low interest rates, maybe he’s ready to hit his sweet spot.
History repeats itself in New Zealand from looking back at 1984. And when you’re falling backwards into the mire, someone should call it out.
I’m still unconvinced the Auckland property market has found its feet in the current environment. Also the recent OCR slash will unlikely change that.
If you want to make money — whatever route you choose — the road to profit is paved with both opportunity and crisis.
As investors, it’s easy to become overwhelmed with all of the issues and trends affecting our wealth. In the NZ economy there are Some good. Some bad.